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Sidley Shale and Hydraulic Fracturing Report - February 23, 2016

Sidley Austin provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Attorney Advertising - For purposes of compliance with New York State Bar rules, our headquarters are Sidley Austin LLP, 787 Seventh Avenue, New York, NY 10019, 212.839.5300; One South Dearborn, Chicago, IL 60603, 312.853.7000; and 1501 K Street, N.W., Washington, D.C. 20005, 202.736.8000. VOLUME 5, NO. 8, FEBRUARY 23, 2016 SIDLEY UPDATE Shale and Hydraulic Fracturing Federal The U.S. Environmental Protection Agency’s (EPA) Science Advisory Board (SAB) panel updates review of EPA’s draft assessment of hydraulic fracturing. A panel of EPA’s SAB issued an updated draft of its review of EPA’s June 2015 draft report entitled “Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources.” The panel’s updated draft peer review report finds “the EPA’s overall approach … to be appropriate and comprehensive.” However, the updated draft also recommends that EPA make a number of changes to its analyses and undertake an additional study to collect more data once this assessment is completed. The panel plans to issue a final set of comments this spring to be reviewed by the entire SAB before a final report is formally submitted to EPA for consideration. The public can participate in the panel process by submitting written comments or joining the panel’s teleconferences next month. U.S. Coast Guard retracts proposed policy concerning bulk shipments of hydraulic fracturing wastewater on barges. The Coast Guard announced that it will publish a notice in the Federal Register withdrawing a proposed policy letter that would have created procedures for shipping hydraulic fracturing wastewater in bulk on barges. The proposed policy letter, which was issued in October 2013, would have required specific chemical analyses of hydraulic fracturing wastewater before permitting bulk shipments of such wastewater on barges. Both environmental groups and some industry representatives had voiced opposition to the proposed policy. According to the notice, barge owners may continue to request case-by-case approval to transport shale gas extraction wastewater under current rules, while the Coast Guard will consider further whether it should institute a standardized process for transporting the wastewater after it has assessed whether current regulations are sufficient. States Oklahoma: Oklahoma Corporation Commission (the Commission) releases plan to reduce volume of underground oil and gas wastewater disposal. The Commission issued a plan to reduce underground injection of oil and gas wastewater by approximately 40 percent in 245 disposal wells in the western area of the state. The plan was developed in response to concerns that increased seismic activity in the state is related to underground injection and is one of a series of actions the Commission has taken in recent months. SIDLEY UPDATE Page 2 North Dakota: Oil production declines in response to lower oil prices. North Dakota’s Department of Mineral Resources released statistics indicating that statewide oil production in December 2015 was 2.5 percent below November 2015 levels and 6 percent below record high production levels in December 2014. North Dakota sweet crude prices have dropped from $27 a barrel in December 2015 to $16.50 a barrel this month, and the number of active drilling rigs in the state is at its lowest since July 2009. If you have any questions regarding this Sidley Update, please contact the Sidley lawyer with whom you usually work, or Roger Martella Partner +1 202 736 8097 rmartella@sidley.com Sam Boxerman Partner +1 202 736 8547 sboxerman@sidley.com Jim Wedeking Counsel +1 202 736 8281 jwedeking@sidley.com Joel Visser Associate +1 202 736 8883 jvisser@sidley.com Ben Tannen Associate +1 202 736 8574 btannen@sidley.com The Environmental Practice of Sidley Austin LLP Our Environmental Practice consists of approximately 40 lawyers who concentrate on environmental and natural resources law. Established more than 35 years ago, our group is now one of the largest environmental practices in the United States, with extensive experience in all aspects of environmental and natural resources law. The depth and range of our practice and the frequency with which we address cutting-edge issues enable us to advise clients quickly and cost-effectively. For further information on our Environmental Practice, please contact David T. Buente (+1 202 736 8111, dbuente@sidley.com), Robert M. Olian (+1 312 853 7208, rolian@sidley.com) or Judith M. Praitis (+1 213 896 6637, jpraitis@sidley.com). The Energy Practice of Sidley Austin LLP Sidley has a diversified and global Energy practice. We represent clients in virtually every aspect of the energy industry, including upstream, midstream and downstream oil and gas companies, oilfield service companies, oil and natural gas, refined products and CO2 pipelines, electric utilities, merchant electric transmission companies, independent power producers, alternative energy developers, suppliers and contractors, energy trading companies and the financial institutions that serve companies in all of these industry segments. Our energy practice encompasses all types of transactional, litigation and regulatory matters. Sidley’s energy transactional practice includes representing clients in a broad range of M&A, capital markets, project development, project finance and syndicated, structured and master limited partnership financing transactions. Our energy litigation practice includes representation of energy industry clients in all types of federal and state litigation and arbitration proceedings. Sidley’s energy regulatory practice includes matters before the Federal Energy Regulatory Commission and state regulatory commissions as well as the U.S. Departments of Energy, Transportation and State. To receive Sidley Updates, please subscribe at www.sidley.com/subscribe. BEIJING ∙ BOSTON ∙ BRUSSELS ∙ CENTURY CITY ∙ CHICAGO ∙ DALLAS ∙ GENEVA ∙ HONG KONG ∙ HOUSTON ∙ LONDON ∙ LOS ANGELES ∙ NEW YORK ∙ PALO ALTO ∙ SAN FRANCISCO ∙ SHANGHAI ∙ SINGAPORE ∙ SYDNEY ∙ TOKYO ∙ WASHINGTON, D.C. Sidley and Sidley Austin refer to Sidley Austin LLP and affiliated partnerships as explained at www.sidley.com/disclaimer. www.sidley.com

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